Farm-bill backlash concerns GOP. Reagan's veto of Congress's aid bill may hurt in the short run, but insiders say the party will gain by `standing firm' against deficits

Washington
— America's Midwest farm crisis may pose the most serious challenge yet to Republican control of the United States Senate after 1986. That's the opinion of a number of GOP insiders, including former White House assistant David Gergen and party leaders in several states throughout the Farm Belt.

Private polls are circulating this week within the White House that show the GOP taking its licks in a half-dozen farm states because of President Reagan's resistance to an increase in farm assistance.

Top Republican strategists suggest, however, that the political effect of the farm debate can be divided into two categories: short term and long term.

In the near term, there is little doubt that the Democrats are making gains in farming areas. But it is felt in the White House that in the long term, Republicans will pick up points with most voters for ``standing firm'' on the budget deficit issue.

The Reagan veto of the emergency farm bill this week was absolutely essential if the White House is to win the deficit battle, aides felt. Says Mr. Gergen:

``Had Reagan backed down on this issue, he would have badly eroded his credibility in the financial community on the deficit issue.'' That could have crippled the stock and bond markets, sent interest rates higher, damaged the overall economy, and, in the long run, hurt farmers even more than the veto.

There's little doubt, however, that Mr. Reagan's tough stance on the farm issue has Republicans in Congress looking over their shoulders. Agriculture, while diminished in many areas, is still a mighty political force in the Midwest.

In North Dakota, for example, one-quarter of the people still live on farms. What happens on the farms is so crucial that it can spell good times or bad in cities like Bismarck or little towns like Enderlin. Even most industries there, such as soybean processors, have their roots in North Dakota's deep, black soil.

The same is true in South Dakota, Nebraska, Iowa, and Kansas. Says a Republican in Nebraska: ``The problem's real here, worse than you'd realize by reading the Washington Post. Out here the story covers three-quarters of the front pages of all the newspapers.''

While Republicans are anxious, the ultimate political effect of Reagan's get-tough stance is still far from clear.

James Sunquist, a political analyst at the Brookings Institution, suggests that two factors will be critical for the GOP and for the President's continued political effectiveness.

First, Reagan must be consistent. If he's going to veto an expensive farm package, he must also be firm in other areas of the budget.

Second, the economy must continue to perk along in high gear. If good times continue into 1986, the political effect of being firm with the farmers could be insignificant. Mr. Sunquist notes that few voters in 1984 remembered the 1982 recession by the time voting day came around.

Even so, the President's farm veto is high-risk politics. Richard Wirthlin, the President's pollster, concedes the veto could ``hurt'' Republicans in 1986 races. But he doesn't see a political disaster.

Gordon S. Black, an independent pollster, says the fallout from a farm veto could be greatest in marginal GOP states such as Iowa. In recent years, Dr. Black notes, Iowa has been among the hardest-hit states in the Farm Belt, ``and this could work against the GOP there.'' But overall, the GOP is so strong in the Midwest that most of its seats there should be secure.

Dr. Wirthlin notes that 7 percent of the nation's voters live in Farm Belt states, and Reagan got 61 percent of their votes last year. Most farmers, he says, realize that their problems ``predate'' Reagan.''

Republicans on the ground level in the Midwest, however, are much more skittish about the farm issue than the pollsters. They use terms such as ``tough issue'' and ``political peril.''

One Midwestern Republican official observes that many local farmers are ``watching their worlds collapsing around them'' while hearing White House officials like Budget Director David Stockman charge that farmers are to blame for their woes because they speculated on land values and tried to get rich.

``The Democrats have really come out smelling like roses,'' the GOP official grumbles.

One point made in state after state is that while some farmers are having problems, others are not. In Nebraska, state party chairman Kermit Brashear says: ``Every farmer is not in trouble. Every lender has not stopped lending.''

But he says the problem is that ``there are too many good farmers who are experiencing difficulty, and too many lenders.''

Mr. Brashear says many of the farmers he talks to put the problem in a different light than is seen in Washington.

In Congress, the emphasis has been on giving farmers more credit. But in Nebraska, he says, many farmers see that as only a stopgap. What's really needed is lower interest rates and better prices for grain. Unless rates are lowered and prices raised, more credit will only delay the day of reckoning, he says.

If Reagan doesn't come up with real solutions, rather than cosmetic ones, Brashear says, Republicans could reap a harvest of discontent in the Farm Belt. On the other hand, if Reagan can find solutions, the GOP could harvest the credit.